Are we next ? Is Canada living beyond its means too ?

Thomas Beyer

Senior Forum Member
REIN Member
Having grown up in Europe .. working in many places across the globe including the US, and now living in Canada for the last 50% (or 25 years) of my life I have come to appreciate both models of governments, pensions, taxes, wages etc. ..



Canada for the last few decades by and large has implemented a fair compromise between a "too socialistic plus too high taxes" Europe and a "too capitalistic plus too low taxes" US model !



However, as I look around here in Canada, talk to investors and fellow citizens, and read articles like the one linked here on



a) vastly increased government payrolls,

b) more and more unwillingness of immigrants to integrate into Canadian values,

c) inappropriate and often costly demands by new immigrants,

d) falling social systems in Europe ,

e) human rights abuses and

f) lack of calls for rejection of extremism (like in the UK or Australia)



and elsewhere I AM GETTING CONCERNED, that Canada too will have problems like the US or Europe as none of the issues are being addressed in earnest here at home !



Specifically:

a) public servants make too much money and have way too generous indexed pensions

b) the deficit is growing as is the debt

c) too much free health care and not enough user-participation

d) a growing expectation of "the government will take of me" as baby boomers age

e) too much entitlement demands by immigrants, pensioners and even students

f) increased multi-culturism i.e. people of different faiths or ethnic origins living side by side increasingly isolated as opposed to in more harmony with shared core values or even language

g) lack of enforcement of white collar crimes

h) lack of freedom-of-speech due to increased potential for defamation law suits and human rights tribunals with quasi-judical powers



I think Canada needs to do more .. MUCH MORE .. to address these issues that we now see emerging in Europe or the US .. as otherwise a formerly healthy Canadian society will end up much like Europe with too much debt, a far lower living standard and far less freedoms !



What are your thoughts on some of these issues ?
 

bizaro86

Frequent Forum Member
Registered
These are definitely some of the biggest problems facing our society. The entitlement mentality is a real problem. As a democratic country, the biggest group of people can impose their will upon everyone else. In our country, that's the baby boomers, who have been bending policy to their will their entire lives. I'm concerned about what will happen to those of us in our income earning years when they're retired, as there will be a very high ratio of retirees to income earners. Additionally, its not a generation that has shown the stoicism of their parents, who mostly lived through the Great depression and/or WW2. I'm concerned the baby boomers will get the government to rapidly expand the already significant government benefits to the elderly to unsustainable proportions.



These benefits are not just GIS/OAS/CPP/Seniors tax credit, but are pervasive throughout all levels of government. One example: In Calgary, an adult transit pass is $90.00 per month, or $1080.00 per year. The cost of a transit pass for a high income senior (low income seniors get a further discount I have no issue with) is $35.00 per year. This is a 96.7% discount off regular price.



Another huge issue you've mentioned is the human rights tribunals. I have a huge issue with these, as they allow people to basically take a run at someone perceived to be a mark (landlord, employer, condo association, neighbour, etc) and have the government pay their bill, while the defendant is stuck with their own tab, often in the tens of thousands of dollars. Many of these cases are settled before they reach the tribunal, as its cheaper for the defendant to do so. It basically amounts to a government sanctioned shakedown, and makes it risky for those with capital to keep it in the country.



Interesting article from today's National Post on this subject: http://www.nationalpost.com/todays-paper/call+this+human+rights/4234346/story.html



Regards,



Michael
 

Hutchym

Inspired Forum Member
Registered
Before starting I would like to agree that in Canada we have it pretty good overall. Essentially is it inpossible to to ever have a "perfect system" or even close. I agree there is a problem in our society of "entitlement". Too large of the population which has already started retiring have a great % of the wealth and yet get handouts from our governments being retired. Some today in there 20's and 30's may never retire..



I think the definate major problem is the erosion of the middle class. In Ontario for instance the government has what they call a "sunshine list" where all government paid organizations must disclose employee's incomes of over $100,000. I do think this list is probably fair seeing as the residents of Ontario must pay for incomes and pensions. However, this list was set up in the mid 90's and the bar hasn't been reset. $100,000 today isn't HUGE money, It is a good upper middle class income.

When this list is sent out every year, the headlines always point out that x amount of nurses or nuclear plant operators have now made the sunshine list.. I personally feel they probably should after putting in 200 hours OT in a year.

The point is, most of these people on this list did years of school and chose to work hard to get where they are. However the government decided not to raise that bar last year showing that they think people making this kind of money are Rich. This number should be raised to the base salary of what MPP's earn as the point of the list in the first place was to keep government accountable.



Another major problem in Canada is the lower middle class. I'd like to give you a real life example from what i've went through just a couple years ago.

I bought a townhome in a low income area with my family. Some good friends of ours lived in nearby government housing. My friend (lets call him Bob and wife Jen) and I both started college at the same time. We both applied for Ontario/Federal student loans. I got $7000 because my wife worked part time $12/hr and I was making an income before going to school $14/hr in sept. Bob got $18000 ($11000 of Free Grant money) because he was unemployed before going to school. I had to pay my normal bills (with a extra part time job), Bob and Jen had geared to income housing where they paid $110 month rent which included heat, hydro, and water, because he had no income to gear the rent to. I have two kids and so does he. I had to pay $35 a day per child because my wife had to work. Bob and Jen had 100% paid daycare for both kids full time because they had no income they qualified for government paid daycare. Because they had no income they also received maximum child tax credits and so on. The point here is not to cut down on those who really need help. The point is that Canadians in situations that are not ideal (lower MIDDLE class) that want to improve there conditions are given very little help when they are out there working to better thereselves, while we give discounts to boomers whom have the money or low income that may/ or may not even care.



Hopefully a Government will step up and start really paying attention to the regular hard working Canadian families and citizens.



Mike
 

bizaro86

Frequent Forum Member
Registered
[quote user=Hutchym]I think the definate major problem is the erosion of the middle class. In Ontario for instance the government has what they call a "sunshine list" where all government paid organizations must disclose employee's incomes of over $100,000. I do think this list is probably fair seeing as the residents of Ontario must pay for incomes and pensions. However, this list was set up in the mid 90's and the bar hasn't been reset. $100,000 today isn't HUGE money, It is a good upper middle class income.

When this list is sent out every year, the headlines always point out that x amount of nurses or nuclear plant operators have now made the sunshine list.. I personally feel they probably should after putting in 200 hours OT in a year.

The point is, most of these people on this list did years of school and chose to work hard to get where they are. However the government decided not to raise that bar last year showing that they think people making this kind of money are Rich. This number should be raised to the base salary of what MPP's earn as the point of the list in the first place was to keep government accountable.




Interesting that you feel this way. I would say 100,000 is a pretty reasonable bar for disclosure. Only 5.4% of Canadian workers make that much or more per year, according to the most recent data available from Statistics Canada. http://www40.statcan.gc.ca/l01/cst01/FAMIL105A-eng.htm Since approximately 25% of the working age population has a degree, your rationale that these public servants "did years of school and chose to work hard" doesn't really fly, since a great number of Canadians don't make near that much money even with degrees and the associated hard work.



One also wonders whether public servants work harder than their private sector peers. Do they work 17% harder to justify their 17% extra wages holding education constant? Or do they work 41% harder to account for the extra wages and benefits they receive over their similarly educated private sector counterparts? http://www.metronews.ca/toronto/comment/article/272769--public-sector-wages-growing-out-of-line



It's kind of hard to tell, because governments keep terrible productivity data. It would be interesting to know whether Canadians would vote in favour (and this is a democracy) of their public servants being paid 17% more than the private sector equivalent, plus given lucrative pension plans (near extinct in the private sector). Taxes and government debt are certainly a problem in this country, maybe public sector wages would be a good place to start righting the ship.



Regards,



Michael
 

Hutchym

Inspired Forum Member
Registered
Thank you for your input Michael. I do feel that 100,000 is a good amount of money. I also feel that most, although they may spend like it, are not floating in cash. I am from Sarnia Ontairo originally where many people in unionized construction trades make 100,000 a year. Mind you, they put many hours in for overtime. Sometimes working over 500 hours a year, enough to equal a 2nd part time job. It is worth noting these jobs are private unionized trade unions working in oil/gas/chemical industries. I also know there are many out there making paycheques in the 90k range and there should be more of them 5 percenters year after year.

In my previous post I was trying to explain is the people in the middle class (lower and upper) are treated as if they have it made. I am not talking about those making $150k with a second income of maybe 25k-30k for spending money, I'm talking about the police officer whom works 200 hrs OT while doing a tough job for $105k a year and his significant other doesn't work while they raise 3/4 kids.

As for public sector workers, I dont necessarily think that the $100,000 sunshine list is not fair. After all, it is the taxpayers that pay the bill and the productions probably awful. I also agree that they are paid higher incomes/ pensions for the same work. I was just attempting to use this tool as an example of where some in the general public have a major misconception that people that work hard to take care of their family, ending up in the upper middle must be bombarded with taxes.



Take care all,



Mike
 

Thomas Beyer

Senior Forum Member
REIN Member
[quote user=Hutchym]The point is I was trying to explain is the people in the middle class (lower and upper) are treated as if they have it made.


True .. unfortunately, public servants at this level HAVE IT MADE !!



They essentially can't be laid off .. and get an indexed pension without ANY contribution.





Hence, counting pension rights alone, public servants are overpaid by about 30% .. or perhaps 40% to 45% if one counts the real risk of job loss or salary decreases in many industries.



One of the core issues in Ireland, or many US states or cities is that they are essentially bankrupt due to those overly generous salaries, early retirement rights and indexed pensions .. and Canada is getting there fast, too !!!



The baby boomer generation, especially is civil servants, is screwing the next generation and leaving behind huge debt and unfunded liabilities. This, in my humble opinion, is one the greatest issues that have to be addressed .. by public servants/elected officials .. hence it won't until voters revolt like they do not in the UK or the US tea party !



Perhaps mass demonstrations like those in Egypt right now are required to get this point across in Canada ?
 

Hutchym

Inspired Forum Member
Registered
I can't figure out how to quote :)



Anyway, Thomas for sure I agree with you that public sector employee's at this pay scale have it made. With there already high, and indexed pensions, superior benefits, job security, and extra 30% pay more than normal for the job there doing.



The private sector employees making a hard go at it making $80-$100 right on pay scale, having to top up there whole pension and save extra for health, dental, and family emergencies is a good solid family income and not over the top.



Maybe less government jobs and more people jobs would work?



Mike
 

RedlineBrett

Senior Forum Member
REIN Member
Thomas, Perhaps you need to start your own political party. You could call it



"The pension is too damn high!"



I'm not sure if you have it in you to grow a beard like Jimmy here below but I think it would help if you're willing!







The rent is too damn high party

 

bizaro86

Frequent Forum Member
Registered
[quote user=Hutchym]I was just attempting to use this tool as an example of where some in the general public have a major misconception that people that work hard to take care of their family, ending up in the upper middle must be bombarded with taxes.




I absolutely agree with this. I would be much more in favour of consumption taxes than taxes on income (aka hard work). There isn't any reason I can think of why those who work harder than others should pay a greater share of the public burden than someone at the same hourly rate who chooses to spend more time fishing.



My point was more that Canadians have a right to know how the government is spending their money, so I'm in favour of more disclosure, not less. Nobody complains about the cops on the streets making good money protecting our cities, since we're getting good value for money, and its a hard and dangerous job. But if the government wants to pay a patronage appointee 100k worth of tax money, I think citizens have a right to know so we can ask our politicians to defend that decision. If they can defend it (since we're getting good value, like from cops and nurses) then it won't be an issue.



Regards,



Michael
 

LondonHomes

New Forum Member
Registered
I agree that government jobs pay far too much and their benefits are excessive. However this is not a problem unique to Canada nor is it a new problem. I also agree that Canada has been lucky to end up in the right spot between the US & Euro systems.



The problems I see facing Canada now is the on going minority Federal government. I believe that one of our strengths is the success of majority government. With a majority government the government is free to implement it's programs and solutions to problems and they do not get watered down. Then when a new government is voted in, it keeps the solutions of the previous government that are working and implements it's programs & solutions to addresses the things that are not working from the opposite politicial spectrum.



This way over a series of several governments we end up with both left wing & right wing solutions that best address issues. This is unlike the US or Europe where you always end up with compromise water down solutions.



The other problem facing Canada is the disinterest of Canadians in the political process. People do not want to think about policy, they do not want elections. And as a result we end with with political partys that take positions that are Good Politics but Not Good Goverment. Harpers cut to the GST is a prime example of this, as is the opposition to the HST in both Ontario & BC. The other implication of this is that people become disconnected between the taxes they pay and the services they demand.



If people demand less taxes they must start by demanding a cut to certain services or programs. Like wise people that demand more services must state that they will accept a tax increase to pay for it.
 

EdRenkema

New Forum Member
Registered
You guys need to take a pill, we've got it pretty good here and we've got a lot of what the rest of the world wants. I totally agree with Thomas & other posters that public sector jobs are fat with benefits & pensions. Realize tho that those jobs take a certain person & a certain attitude. Years ago I was working myself into a public sector job as a paramedic and a friend of mine said to me " Ed I think you're a redneck and the beauracracy in this job will drive you nuts " My eyes were opened and the rest is history...

There is always a price to pay. Yes Canada has its issues but we are still here and still doing well. We have a standard of living and a banking system that the Americans and Europeans are coming to envy.

I've come to have a grudging respect for Harper & Flaherty for the proactive implementations they have completed in the past 5 yrs. Its far from perfection but we are being steered in the right direction and we do have a lot of what the rest of the world wants - and lots of it!

If there is anything the average Canadian needs its financial education. This is not the financial literacy the current beauracracy is attempting to implement (government & financial literacy should not be in the same sentence-oxymoron!)

I'm not at all being complacent I do think there are concerns, I also think we are in the right place and at the right time.
 

EdRenkema

New Forum Member
Registered
BTW Brett, love that guy 'The rent is too damn high' -pure entertainment (and not at all stereotyping :))
 

Thomas Beyer

Senior Forum Member
REIN Member
[quote user=EdRenkema]I do think there are concerns, I also think we are in the right place and at the right time.


true enough .. relatively speaking we do VERY well .. but we "got lucky" with all those natural resources: forests, water, oil, gas, uranium, potash, loads of agricultural land ...



We can and must do better for our children's sake to let them not drown in debt like our American and European bretheren !!
 

EdRenkema

New Forum Member
Registered
[quote user=ThomasBeyer]We can and must do better for our children's sake to let them not drown in debt like our American and European bretheren !!


Agreed.
 
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